Redford is Right on Doctor Pay Freeze, but only if Medicine is Equitably Shared

Premier Allison Redford has taken some heat from the Alberta Medical Association over her claim that there is simply no money with which to give them a raise, and she’s right. Hopefully her austerity with the doctors will extend to other government employees as well.

This year, Alberta faces a deficit that the Canadian Taxpayers Federation (CTF) estimates could reach $5 billion. Even if the Premier broke her election pledge and hiked taxes – such as re-introducing a health care premium – the new cash wouldn’t even come close to balancing the budget, let alone free up money for raises. Just as a private business can’t afford to give its employees a raise while it’s hemorrhaging money, the province can’t afford to give its employees a raise while it’s broke.

According to the Canadian Institute for Health Information, Alberta’s physicians earned $350,000 a year in 2010, a healthy 12 per cent above the national average.

While the province may be saying no to doctors in 2013, they certainly haven’t said no to the rest of the bureaucracy. There are currently more than 29,000 full-time bureaucrats in the core public service (excluding the education and health care systems) making $3 billion in wages, salaries and benefits. This means that the average bureaucrat in Alberta costs taxpayers $102,000 a year.

According to the Fraser Institute, government employees in Alberta are currently out-earning their private sector colleagues – in the same jobs – by 10.3 per cent. This is massive premium paid to government workers who also enjoy unrivaled job security.

Remember the recession that began in 2007? Government workers don’t. While private sector employment in Alberta declined by 7 per cent between September 2007 and September 2009, public sector employment increasedby 8 per cent. Simply put, if you were a government worker, the recession didn’t happen.

Historically, this ironclad job security meant that government workers were expected make slightly less then their private sector colleagues. This is no longer reality today.

The Canadian Taxpayers Federation estimates that bringing government workers’ salaries, wages and benefits into line with the private sector would save taxpayers more than $1.4 billion, every year. A further $150 million would be saved by cutting the number of core government bureaucrats by 5 per cent. This wouldn’t need to result in the layoff of a single frontline worker.

Had the Alberta government not increased wages and staffing numbers, there would be no need to take action now. But they did and thankfully Premier Redford has recognized this problem in dealing with the Alberta Medical Association (AMA). The beast however is much larger than the AMA. In fact, if austerity were limited only to doctors, then AMA members would have legitimate reason to fight back.

When Ralph Klein wrestled down Alberta’s massive deficit in the early 1990s, he ensured that no one group was unfairly targeted. If the government were going to cut spending, the cuts would be broad-based and equitably shared. Klein was upfront with Albertans that everyone was in this together and that nobody was going to be untouched.

Premier Redford is right to deny a raise to the AMA while the province is broke, but expecting doctors to carry this load alone will leave them feeling cheated, and the province still in the red. As Premier Klein understood, everyone must share the pain.